Prepaid cards are increasing in popularity

Whether their consumer credit score has taken a hit or they are trying to limit identity theft risk, consumers are increasingly turning to prepaid debit cards.

According to Consumer Reports, prepaid cards were used 1.6 billion times in 2012, totaling $77 billion in transactions. As more people use prepaid cards, businesses and financial institutions would be wise to begin offering a wide array of options.

It appears as though banks are beginning to take the hint, as a recent study conducted by the American Bankers Association revealed nearly 60 percent of banks offer prepaid debits cards as alternatives to traditional bank accounts, Cleveland.com noted.

Previously, prepaid options came with high fees and weren't as favorable for the consumer, but that is beginning to change.

"Not all prepaid cards are created equal," said Michelle Jun, senior attorney with Consumers Union. "The good news is that prepaid card fees have come down and a number of cards offer many of the same features you get with a bank account."